Earnings Recession Is Here, Does It Matter?

The weekly Market Update is posted at Alpha Baskets and includes the following; Speaking of earnings season, Barron’s cited Voya Financial when it reported that so far Q1 earnings are down 7.2% with about 20% of companies having reported so far. In our last report we noted that earnings recessions “always” lead to economic recessions but there has never been a recession with weekly jobless claims in the 200k range. Please click through to read the entire update. We are continuing to make our way around northern Italy. Over the weekend we headed up to Florence. The first picture is a panoramic of the Duomo and Cathedral early Sunday morning before the crowds hit. The next picture is of the Arno River in Florence. On Sunday we took a long drive up to Fanano where my wife’s great grandparents came from and afterwards we went to the Ferrari Museum in Modena. Holy cow. I will post more on Instagram @rogernusbaum and on my Facebook page Random Roger’s Pictures...

It Doesn’t Have to Be That Difficult

My latest post for Alpha Baskets looks at the extent to which make their lives much more difficult than it needs to be including how they invest. From the post; So it is with investing. We look at behavioral factors that make investing so much more difficult than it needs to be. It may not be easy to participate successfully in markets but it is eminently achievable. Here, success is not defined by beating the market, as any mediocre (or better) investor will at least occasionally beat the market but all investors will regularly lag markets, but instead is defined by having enough when you need it (presumably for retirement) without blowing yourself up being too fearful or too greedy. Please click through to read the entire post. As mentioned previously we are in Italy. We started in Milan and are now in Vernazza for a bit. Below are a couple of pictures of what we have seen. The first one is the Basilica that is tucked in behind the Footlocker (seriously). The other day I posted a panoramic picture of the Duomo, this one is up on the roof. If anyone was going to see a fire truck in front of the Duomo, it would probably be me. Last one for now is Vernazza, where I am posting from. It is part of Cinque Terre, the five villages down on the coast kind of near Genova (Genoa). There’s a lot of hiking to do here....

Risk: Still On?

This week’s market update is posted and includes the following; The gains of late have been impressive, Bespoke Investment Group reports a 15% lift for the S&P 500 in just the last 50 trading days. Economic data in the US appears to be sending mixed signals at best, with strong job growth and weakness by just about every other metric. The larger foreign central banks are still being very accommodative because they have to be. All of this is likely contributing to the disconnect between fundamentals and market performance. Please click through to read the entire update. It was a big big weekend starting with the annual Prescott Basin Ops Drill (wildland fire related) that I have been involved in planning for the last five or six years. This year we had live fire for the time in about 12 years. Then in a bit of a whirlwind situation my wife and I flew to Italy where I am posting this from. I will have more about this later in the week but we just landed and are a little short on sleep. We’re going to be moving around a bit but hopefully the last picture on this post from Milan is an interesting start. The first picture is from the Basin Ops drill. The yellow truck is from Bureau of Land Management (BLM). We don’t really have any BLM land here so we don’t see them very often. The green truck is of course from the Forest Service. As we were taking off from the airport, this was staged on the runway fro some reason. Piaza del Duomo...

Moderately Constrained

My latest post at Alpha Baskets looks at the recent Barron’s cover story on Bill Gross and some of the strategies he has implemented under the hood of the fund he’s now running at Janus. From the post; In terms of trying to find bond proxies many have suggested more exposure to dividend paying equities which I have maintained is a terrible idea. Equities that have high dividends or growing dividends or any other kind of dividend are not bond market proxies they are equities and should be expected to trade like equities not bonds. There is nothing wrong with dividend oriented equities (although I would not suggest owning them exclusively in an equity portfolio), I am simply saying they are not substitutes for bonds. Please click through to read the entire post. Exciting news for the Prescott area; we are getting an NBDL Team for the upcoming season. The Phoenix Suns are relocating and renaming the Bakersfield Jam to the Northern Arizona Suns. Part of the announcement included the Suns Gorilla and his Hummer H2. Our Hockey team folded a couple of years ago so hopefully NBDL can do so well that our area becomes attractive enough for minor league...

Heads (Of State) Are Gonna Roll?

This week’s Market Update is posted at Alpha Baskets and includes the following; Continuing the thought on Japan is the curious action of the yen. As soon as the Bank of Japan set out to devalue its currency the yen immediately rocketed higher as the dollar has lost 9% in the last two months. Barron’s Up & Down Wall Street column was devoted to trying to sort this out, offering several possible explanations from several experts but with no real conclusions. Throwing our hat in the ring, we explored the notion of heavy handed central banks here before and the extent to which things often do not go as planned. The FOMC policy of the last eight years as well as the various asset purchases have delivered far less than what was expected in terms of growth and economic activity but yet heavy handed central bank policy won’t be going away anytime soon. Please click through to read the entire update. We have a new neighbor in Walker and he owns a Pinzgauer;  ...